Other Theme Parks Ride High, but SeaWorld Is Still Sinking

Seaworld Parks & Entertainment via PRNewswire/AP
Amusement parks and more lavish theme parks are doing great these days -- unless you happen to be SeaWorld Entertainment (SEAS). The marine life attractions specialist posted another disappointing quarterly report Thursday.

Revenue declined 3 percent to $264.5 million during the fourth quarter relative to the prior year's showing. A combination of a 2.2 percent decline in attendance and a 1.9 percent slide in the average amount paid to get into one of its gated attractions led to the year-over-year decline, partly offset by folks spending more once they were in the parks.

SeaWorld's adjusted net loss widened to 21 cents a share. Red ink isn't problematic or a surprise. This is a seasonal business, and SeaWorld historically makes more than enough money during the potent second and third quarters when schools are out to offset the deficits during the first and fourth quarters. However, the adjusted shortfall was far worse than the 11-cent-a-share deficit it posted a year earlier and the 16-cent-a-share loss that analysts were targeting.

Shrinking Fish in a Growing Ocean

SeaWorld and the rest of the industry appear to be passing ships. Other park operators are posting record revenue and attendance, but SeaWorld's going the other way. Attendance slipped 4.2 percent for the parent company of SeaWorld, Busch Gardens, and Aquatica for all of 2014, following a 4.1 percent decline in 2013.

The struggling park operator points to a smaller decline during its most recent quarter as a sign of improvement, but let's check out how the competition fared during the holiday quarter.

Market leader Disney (DIS) experienced a 9 percent uptick in revenue at its parks and resorts subsidiary, pulling off a 20 percent spike in the segment's operating profit.

Propelled by the runaway success of its Harry Potter expansion in Orlando, Universal parent Comcast (CMCSK) led the way with a blazing 30 percent pop in revenue at its theme parks.

Six Flags peer Cedar Fair (FUN) also made the most of the holidays, with revenue soaring 16 percent. Six Flags and Cedar Fair have posted record results for five consecutive years.

The industry's looking pretty good. Scandal-ravaged SeaWorld, on the other hand, isn't doing so hot.

Saving Shamu

SeaWorld knows that it's in trouble, and it will take more than a new CEO to turn things around. Activists are clamoring for an end to orcas in captivity at its namesake parks, and what started with a small documentary that didn't make a lot of waves in its initial theatrical release two years ago has been a major reason that folks are staying away from SeaWorld.

SeaWorld wants to win back its good name. It announced during Thursday morning's earnings call that it will be rolling out a reputation-restoring campaign by April. It had better be effective, because SeaWorld itself appears to be scaling back on the new rides that park operators typically rely on to woo new guests. Outside of a new roller coaster at Busch Gardens Williamsburg, most of the additions across its parks in 2015 consist primarily of updating show environments.

They say that a rising tide lifts all ships, and while that appears to be the case for nearly all of the theme park operators, rising waters only make matters worse when there's a hole in your ship.